The Risk Behind “Shitcoins”

The Risk Behind “Shitcoins”

If you are new to the crypto space, then chances are you are new to major asset types like Ethereum, Bitcoin, and so on. However, most people who have been directly involved in crypto often pay attention to new assets to see their potential for profit. New crypto asset types carry high levels of risk, but can also provide huge returns with the right strategy. That is why cryptos that have just appeared on the market are often referred to as shitcoins.

What are Shitcoins?

“Shitcoin” is a term for crypto assets with a very low market capitalization but very large supply of tokens. The name “shit” comes from the low price. This type of coin is a newly-released crypto and does not have a clear long-term goal. In general, a crypto asset is called “potential” or “good” if it has a clear trajectory and does not depend solely on profits and supplies sold in the market. For this reason, the shitcoin is still considered a high-risk asset that is not a recommended investment tool for beginners.

Despite the high risk, most experienced crypto investors pay a lot of attention to shitcoins. They will analyze whether each new asset can generate a larger profit compared to other coins. But they also prepare a good strategy to avoid big losses. In most cases, the sooner someone enters and then exits the market, the higher the profit. The slower, the greater the potential for loss.

As previously explained, shitcoins are very cheap assets. Sometimes, you can purchase millions of coins with only Rp. 100,000. This is because the market price is of small value compared to the dollar. 

Why are Shitcoins so Popular?

Despite the high risk, shitcoins are still in great demand by many people due to the low price and great profit potential. With low prices, many people can start small and still buy a lot of coins. With so many coins, you can also get big profits with high potential to increase the value of shit coins. With a small amount of money, you have the potential to get profits many times over in a fairly short time.

Examples of Shitcoins

The shitcoin became a hot topic in November 2021 due to the soaring value of Shiba Inu. However, not all shitcoins have the potential to be used as an investment. You need to do the right analysis to choose a coin that can be profitable. Here are some examples of shitcoins that are in high demand in 2021 (*examples are taken based on several sources in the media, and not our recommendation, investment risk is the responsibility of each investor):

  1. Shiba Inu
    This coin has become a hot trend for the past two months, as seen from the Google Trend search for the keyword ‘Shiba Inu coin’ which has soared lately. Created by someone under the pseudonym Ryoshi, this token has a social cause—its proceeds are donated to a dog-raising foundation. Shiba Inu is also often referred to as the Doge Killer Coin because of its success in defeating the Doge coinmarketcap asset in October 2021. In addition, this coin also gained popularity through Elon Musk, who Tweeted about it. Despite its popularity, this shitcoin has also become a favorite investment tool for many people in the world.
  2. BabyDoge
    BabyDoge coin is often referred to as the child of Dogecoin. Despite being relatively new, this asset was created with an ambition that includes social causes of pet donation, the creation of NFT, GameFi, and many others. Like most new crypto assets, the creator of this asset is anonymous. However, since its founding, BabyDoge has managed to gain up to 250,000 token holders, 85,000 Telegram members, 85,000 Twitter followers, and 45,000 Instagram followers. On July 4, 2021, BabyDoge’s price reached $0.000000007695, increasing by 44x from its initial price.
  3. Safemoon
    This token once occupied the top position in the coin market and has the most watchlists in the history of coinmarketcap. Safemoon is the first crypto to make products in physical form—Safemoon cards and hardware wallets.
  1. Saitama
    This token is a community-based asset that aims to provide solutions for the education of the next generation of investors and create a secure crypto asset. Saitama focuses on Gen Z investors, 93% of whom are beginners who are still confused about finances. Saitama’s vision is to provide the right content on the basics of investing that can support young investors to make profit. Currently, Saitama is in the third of five planned stages. They intend to launch a marketing campaign on TikTok and Twitter to reach 100,000 holders. In the end, Saitama intends to donate to students and educational charities.

 

Risk of Shitcoins

As assets that are still in the development stage, most shitcoins still have a high risk of losses. The price also depends on the communities that support it, so its movement is still unpredictable. Shitcoins are also used for scams, such as the Squid Game coin taking advantage of the popularity of the Netflix drama. After the price went up and many were bought, the price of this coin dropped because the developers ran away with the profits. Therefore, it’s a good idea for beginners to avoid buying shitcoins if they lack experience and good analytical skills.

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